Structure & Strategy

1. Structure & Strategy Strategy Concepts Strategic Value Adding Strategic Architecture Design

2. Strategy Concepts VISION in 10, 20….. Years’ time STRATEGIES How to Achieve the VISION over time – leveraging the PUSH and mitigating the WEIGHTS Who, where & when ACTIONS PUSH (Supportive forces) WEIGHTS (Holding Back forces)

3. Strategy Concepts Strategy Plan VISION Desired Environment Outcomes Results in Mission is the scope of actions Activity Scope Goals Over Time & Place Achievement KPIs Within scope Measured by Targeted Outputs Strategies Who, where & when ACTIONS

4. Value Add Strategic Foci / Questions How to Increase & Sustain Market Shares? How to reduce operating costs & increase productivity? Market Share $ Efficiency The more people buy the better The cheaper we produce the better PROFIT = SALES - COSTS • Why people buy? • Best Price • Value for Money • More$ must be good stuff • Pay more to save the world • Why people buy? • Essential • Unique • Feel Good • Good cause How to create Value Add?

5. Value Chain Value Adding Gives Value Adds to: Customers Firm Employees Shareholders Business Partners Community at large

6. (Architecture) Types of International Strategies Global Strategies Multi-DomesticStrategies Standardized products/services Common culture Common processes Centralised control Varying local products/services Local culture Local processes Decentralised control • Regional Strategies • Transnationalstrategies •  • Are about mixing global & MD strategies by: • Country grouping (regional) • Or other strategic benefits -eg low cost supply advantage (transnational)

7. Strategic Change Choices GLOBAL STRATEGY TRANSATIONAL STRATEGY Cost reduction pressures INTERNATIONAL STRATEGY MULTI-DOMESTIC STRATEGY Local Responsiveness Pressures

8. International Strategy Planning Framework (MGX 5181 Model) Implementation requires Strategic Choices Global   multi-domestic strategies chooses Configuration & Integration Structures & Means How HQ coordinates & control other locations Actor MNC influences Corporate & SBU level strategy planning Integrated in Core competency Development International Value Chain Configuration has influences Corporate Social Responsibility Corporate & Country programs Good Governance Frameworks supports Country Level strategy planning Environmental scanning Scenario planning Modes of Entry & Ongoing Bus Integrated in Integrated in Implementation Planning Deployment Structure & Control supports Deployed via

9. Discussion Qs MNC (2.58 m) - https://www.youtube.com/watch?v=szH2g1dQdCM In a world of zero transportation costs, no trade barriers * non trivial differences between nations with regard to factor conditions, firm must expand internationally if they are to survive - discuss What do you see as the main organisational problems that are likely to be associated with implementing a transnational strategy? Describe what org architecture a transnational firm might adopt to reduce the costs of control. What is the most appropriate organisational architecture for a firm that is competing in an industry where global strategy is appropriate?

10. Case Study Qs IBM 100 years history (13.2 min) - https://www.youtube.com/watch?v=39jtNUGgmd4 In the 1970s – 1980s, Palmisano states that IBM was organised as classic MNC? What does this mean? Why do you think IBM was organised that way? What were the advantages of its internationalisation? By the 1990s, the classic multinational strategic orientation was no longer working well for IBM. Why? What are the strategic advantages to IBM of its global integrated enterprise strategy? What kind of organisational changes do you think had to be made at IBM to make this strategy work? In terms of the strategic choice framework, what strategy do you think IBM is pursuing today?